So You Want To Buy A Short Sale?

There are a lot of opportunities to get a great deal on a new home right now; interest rates are incredibly low, foreclosures are still abundant...and then there are short sales.

Definition of a Short Sale, courtesy of CDPE:

• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

If you are a buyer looking to purchase a short sale, know that it can take 3-6 months to get a deal closed, in most cases; if you're dealing with a local lender sometimes it's much quicker.

Here is the typical process for a short sale:

• Bank acknowledges receipt of the file. This can take 10 days to a month.
• A negotiator is assigned. This can take 30 to 60 days.
• A BPO (Broker Price Opinion) is ordered. The bank probably will refuse to share the results of the BPO.
• A second negotiator may be assigned. This can take another 30 days.
• The file is sent for review or to the PSA. This can take 2 weeks to 30 days.
• The bank may then request that all parties sign an Arm's-Length Affidavit.
• The bank issues a short sale approval letter.

Sold for $160,000

The Puffer Team has handled numerous short sales over the years.  Our most recent short sale, from offer to closing, took approximately 4 months, thankfully we found a buyer who wanted the home bad enough that he was willing to wait out the process.  In most cases a short sale will run through three or more buyers before it closes as buyers get frustrated and walk away.

If you're a buyer with patience, and willing to wait out the process, a short sale may be a better option for you than a foreclosure.  Most short sale properties are lived in and maintained, and while sometimes in slight disrepair, they are usually move-in ready.

Are you interested in learning more about buying short sales?  Give The Puffer Team a call today, 828-771-2300; click here for a list of short sales in the Asheville area.